Proposals for pension contributions revealed
The government has set out proposals to increase the amount civil servants put into their pensions in 2012/13.
The Civil Service Pension Scheme plans, which went out for consultation today, will raise £180 million in 2012/13.
When added to similar changes to the pensions of teachers and health service staff the saving will be £1 billion.
The paper proposes that those earning up to £15,000 full-time would not have their contribution rate raised while civil servants earning up to £21,000 would pay no more than 0.6 per cent more. Overall no civil servant would see their contributions increase by more than 2.4 per cent.
At present civil service employees contribute between 1.5 per cent and 3.5 per cent, and their employer contributes 19 per cent.
The proposals follow a report by former work and pensions secretary Lord Hutton which recommended pensions be worked out on a pensioner’s average salary over their career rather than the sum they earned at retirement.
The two main civil service unions opposed the plans. They said they would try to reach agreement with government but warned of the possibility of strikes.
Jonathan Baume, general secretary of the FDA which represents senior civil servants, said: ‘Any increase in pension contribution rates during a pay freeze and with the current relatively high inflation is completely unjustified.
‘This is nothing more than a pay cut for civil servants as part of the government’s deficit reduction programme. It will do nothing to secure long-term sustainable pensions.’
The Public and Commercial Services Union said: ‘We need to be sure that these talks are real negotiations not just about implementing predetermined plans… Unless the government engages in serious and honest negotiations, more public sector workers will be striking in the autumn.
‘This will be critical to ensure the so-called consultation is taken seriously by government. We know that our pensions are affordable and sustainable – indeed earlier in the week a senior cabinet minister, Andrew Lansley, said that the government’s proposals were wrong.’
To tackle the deficit the government should invest in job creation and confront the £120 billion in taxes lost through evasion and avoidance, it added.